CSIQ PRICE TARGET RAISED FROM $6.90 To $25

Did you catch this little news article from Barron's this morning? As usual...I was skimming through the article, as I do with most, until I got to the last sentence of the article. (see at the bottom of this page) That's when I went back and re-read the section that said Nomura analysts Nitin Kumar and Ragvendra Divekar had raised their price target on Canadian Solar (CSIQ) from $6.90 to $25! I can't remember the last time I had seen a price target raised so dramatically.

Barron's Article:Yingli Green Energy (NYSE:YGE) has surged 12.2% to $3.22, Canadian Solar (NASDAQ:CSIQ) has spiked 11.6% to $10.49, and Trina Solar (NYSE:TSL) has jumped 7.4% to $6.37. Even the two most beaten down names have rallied: Suntech Power (NYSE:STP), which if anyone has forgotten filed for bankruptcy, has gained 6.1% to $1.02, while LDK Solar (NYSE:LDK), which missed a bond payment, has gone up 8.8% to $1.48. Yingli appears to be gaining on news that it has agreed to supply solar installations for a project in China's Yunnan province. Bloomberg News, meanwhile, says that China will make it easier for its solar companies to get financing, among other steps to boost the industry.

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China, the world's biggest maker of solar panels, also will move to stimulate domestic demand and encourage mergers and acquisitions as part of a package of measures announced last week by the government. China's solar-panel industry, which supplies more than half the world market, is unprofitable amid a global glut and slower economic growth that's cut demand.

We maintain our Buy given: 1) solid execution of its projects business with continued pipeline expansion; 2) margin expansion driven by higher sales exposure to high-margin markets and 3) margin expansion in modules with further cost reduction. While CSIQ has risen 175% YTD (MSCI China: -5.7%), it still trades at 2014F P/BV of 0.6x (BVPS: USD15.26) and 2014FP/E of 1.4x (EPS: USD6.67) - levels we see as very attractive. Catalysts should come from 2Q13F earnings, with likely positive EBIT margins and strong cash-flows from project sales. Catalysts should come from 2Q13F earnings, with likely positive EBIT margins and strong cash-flows from project sales.

Kumar and Divekar raised their price target for Canadian Solar to $25, from $6.90, nearly 140% higher than its current price.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.